Will an IVA affect my ability to trade?

Unlike bankruptcy, an IVA shouldn’t affect your ability to trade as it’s basically a private arrangement made as between you and your creditors.  That said, some professions still need to be notified if you enter into an IVA so it’s always advisable to check your contract of employment (or ask your insolvency practitioner to, since they’ll know exactly what they’re looking for).

So, bankruptcy COULD affect my ability to trade?

Yes.  If you’re made bankrupt then a number of restrictions will be imposed and these could certainly affect your ability to trade.  There are, in fact, a number of professions which are affected by bankruptcy and these include (but are not limited to) the following:

• Being the company director of a limited company
• Police service
• Armed forces
• Prison service
• Insolvency practitioner
• Member of Parliament or local authority
• Solicitors
• Accountants

If you’re in any doubt whatsoever about whether your ability to trade will be affected then you MUST seek advice – otherwise you could find yourself being dismissed with immediate effect and that clearly won’t help your financial situation going forward.

How long will these restrictions stay in place?

If you enter into an IVA then you shouldn’t need to concern yourself with any restrictions.  In fact, you don’t even have to tell your bank or building society about your IVA.  Your IVA will simply last for a typical period of 5 years (or 60 months) and will then end; along with the requirement for you to continue paying into it.

If, on the other hand, you enter into a bankruptcy then you can expect the restrictions to remain in place for 12 months and sometimes, up to a period of 3 years.

How confidential is an IVA?

An IVA is very confidential and, unlike bankruptcy, won’t appear in any press publications.  It will, however, appear on the Insolvency Register for the duration of your IVA and for 3 months afterwards.  That said, you’re not obliged to inform anyone that you’re on the Register and unless you tell them otherwise, it’s highly unlikely that your employer, friends or family will check it unless you expressly specify otherwise.  What’s more, whilst you’re in the IVA, your creditors won’t be allowed to contact you directly, whether by phone, correspondence or even home visits.  This provides a huge relief for most debtors since recovery action can prove to be extremely stressful.

Will an IVA affect my credit rating?

 Yes.  An IVA will appear on your credit file for a period of 6 years (as well as being recorded on the Insolvency Register).  That said, once you’ve satisfied your IVA in full you’ll be given a certificate of completion by your insolvency practitioner and you will write off debt which means you can concentrate on getting yourself back on track without having to worry about outstanding debt.  In fact, many debtors utilise the end of their IVA to put their monthly payments into a savings plan and ultimately look forward to a few little luxuries!

Author: Uday Tank has been working with writing challenged clients for over five years. His educational background in family science and journalism has given him a broad base from which to approach many topics. He especially enjoys writing content after researching and analysing different resources whether they are books, articles or online stuff.